Abstract
Corporate governance, as defined by the Australian Stock Exchange, involves "those monitoring and control mechanisms that are put in place by companies with the objective of enhancing shareholder value." Audit committees are one such corporate governance mechanism whereby companies have attempted to respond to the growing public pressure for greater accountability brought on by major corporate collapse. Australian public companies are currently not required to form audit committees, either by statute of by ASX listing rules. However, the decision of the ASX not to mandate audit committees is in conflict with recommendations of the Working Group on Corporate Practices and Conduct and the Working Party of the Ministerial Council for Corporations, which have recommended audit committees be formed by all companies listed on the ASX.